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U.S. firm that bought The Bay is scouting out new investments here


The New York private equity firm that bought Canada's oldest retailer last year says it's on the lookout for more opportunities to invest in Canada.

"Canada has performed better than anywhere in the world," said Richard Baker, chief executive officer of NRDC Equity Partners, which owns the Hudson's Bay Company.

"We are very bullish on Canada," Baker said in a telephone interview. "We are highly interested in an additional investment in Canada."

Baker declined to be more specific, saying there was nothing he could disclose at the moment.

It has been just over a year since NRDC bought Hudson's Bay from the family of the late Jerry Zucker, the South Carolina industrialist who died suddenly two years after buying the retailer and taking it private. In that time, the new owners have managed to find $300 million in savings, representing 14 per cent of HBC's budget, and there's room for more, Baker said.

HBC's department store chain, The Bay, is on track to double its profits in Canada this year and is outperforming other department store retailers, Baker said. He did not disclose sales figures.

Part of The Bay's success is due to Canada's relatively strong economy and the fact that its performance had been "subpar" before NRDC bought the firm, he said. "I think we had more room than other people to improve."

The Bay had previously been operated as a monopoly because it saw no direct rival in the department store category, but in fact it faces stiff competition from specialty stores, Baker said.

HBC's discount merchandiser Zellers continues to face challenges and has performed slightly below NRDC's expectations. The retailer spent most of the second quarter renovating stores and modifying the offering, Baker said. He expects it will perform better in the second half of the year. Zellers faces a tough competitor in Wal-Mart, the world leader in discount merchandise.

Earlier this week, the NRDC group spun out a special purpose acquisition company to invest in basic-needs retailers, such as supermarkets and drugstores, in the U.S. The move would have no impact on Canada, Baker said.